RE: Dont forget the AGM - wantedman
Remember wantedman's post of May 19?
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As i dont have much experience concerning the geo,but been investing in resource stocks for nearly 10 years now, here is one important point, that you should keep in mind.
There are some good arguments, that Horn was setup as an endplay from the beginning.
Horn is fully funded to even start drilling in Nugaal without the warrants to be exercised.
Hence they dont have to care what the markets think of them in the meantime. They dont need to raise money now, everything was planned and setup a long time ago.
At the end of May the Horn AGM will take place and at this event, the option price for management will be decided. That price is usually fixed as the average sp some 10-30 days before the AGM.
Hmmm, what do you think they would prefer:
A sp of 3-4 Dollars after they announced a "discovery" or some 0.80 cents after the RNS they just released? I think the answer is quite obvious. If one expects Horn to be sold directly after a success in Puntland, this AGM is probably the last chance for management to participate further in case of a success. And there are some further points hinting strongly in that direction. AOI outsourced Horn exactly for that reason. They kept Kenya and Ethiopia in the main vehicle because they plan to develop these assets by themselves. Not so with Horn.
After an email from Peter Landau (MD of Range) which was posted somewhere it looks like he had to persuade AOI/Horn to be able to publish the volumetrics, which he did yesterday in the Q&A. You noticed nothing like this was published from Horn or AOI. Strange isnt it ? This is some very important information for shareholders, but the Canadians choose to withhold this info from the markets.
I think it is quite possible that they are prettty sure they have something worthwile and know once they were able to proove the whole asset up that Punty can be sold for 850 Mio to 1.4 Bio USD (based on 170-280 mmbls at a price of 5 USD for OIP)
But why tell the market now in very clear statements, when you can legally publish something which will cause a lot of uncertainty and thus a weak sp.
Horn management want the options as cheap as possible IMO and the way it looks they are successful with their plan. The eagerness that Peter Landau showed to publish the volumetrics is a sign that his interests are not the same IMO. And quite logical too, as his interests are for Range and his shareholders.
No point in selling now at the low point IMO. Markets are in turmoil, the "Get-rich-quick"-Brigade just jumped ship, but will return once we start drilling in SN. So in case you dont want to risk waiting for the final result it is probably a much better option to sell just before we reach the TD in SN, as the sp has a high probability to be higher than today.
I personally will stay and wait for the final result as i am quite confident that we will be rewarded. Taken the numbers that PL published in the Q&A this should result in something like 4-7 CAD for Horn, 5-8 p for Range (compare this to the current sp !!!) or 40-70p for RMP.
A further point to underpin this theory is the Reuters article which stated "comercial quantity" in the first version, but this passage was clipped in the update-2 version...